Meet Dorothy Namawejje (26), a young coffee farmer who works with Kibinge Coffee Cooperative Society (KCCS) as a lab attendant. In that role, she ensures that coffee from the farmer members meets the required standards. Through its SACCO, the coffee cooperative introduced a loan scheme which specifically targets youth to access credit. By signing a letter of undertaking with the cooperative, youth gain access to salary loans.
In 2018, Dorothy applied for and received a salary loan of UGX 6,000,000 (approximately 1,500 Euros). The loan was to be repaid in a maximum of 2 years time at 12% interest per annum. It helped her to invest in coffee farming, as she was able to purchase 0.5 acres of land. In the meantime, she has completed servicing her loan and in the first season she has harvested two bags of coffee. This resulted in an earning of UGX. 400,000 (100 Euros), as proceeds from the sale of her produce.
Commercial banks in Uganda offer loans at average 22-24% per annum and would require collateral which Dorothy would not have been able to bring in. This example illustrates beautifully how effective cooperation between cooperatives and SACCO’s can support the young generation to stay in the rural areas and engage in commercial agriculture.
Initiatives like these promote self-employment and opportunities for youth to develop themselves. Moreover, they help to reduce the rising levels of youth unemployment, and because of promoting entrepreneurship, valuable employment can be created in Uganda.